Which of the Following Statements Is Correct

question 108

Multiple Choice

Which of the following statements is correct?

• A) Performing cross-sectional ratio analysis refers to assessing how a firm performed over a certain section of time.
• B) Performing cross-sectional analysis is easy since industries are usually clustered with firms that are identical.
• C) Time-series analysis is useless in assessing improvement or deterioration of ratios since the data is historical.
• D) To interpret financial ratios, users should analyze the performance of the firm over time and the performance of the firm against one or more companies in the same industry.

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Definitions:

Proprietors' Income

The income earned by owners of unincorporated businesses, reflecting their production and sales efforts.

Rent

A periodic payment made by a tenant to a landlord in exchange for the use of land, a building, or another property.

Landlords

Individuals or entities that own real estate properties and rent them out to tenants, earning rental income in return.

Pierre-Joseph Proudhon

A French philosopher and politician, known for declaring "Property is theft!" and for his contributions to anarchist theory.